Ericsson predicts tenfold increase in mobile data traffic in five years

Mobile data traffic is set to explode in the next five years as consumers add more devices to the mobile networks and operators deploy faster networks, according to equipment vendor Ericsson.

The big news from the company's most recent mobility report, published Tuesday, is that wireless operators throughout the world must prepare for a tsunami of data usage on their networks. This should come as little surprise to wireless operators, who have been preparing for the sharp growth in mobile data, which has also been predicted by other equipment vendors such as Cisco Systems.

Ericsson forecasts that there will be a tenfold increase in the amount of data on mobile networks by 2019 as compared with 2013. This increase in the volume of data on wireless networks is the result of several factors, including the overall growth in wireless devices on networks, an increase in smartphone usage, and the deployment of faster 4G LTE networks throughout the world.

Here's a look at some of the highlights from the report:

Increase in machine-to-machine devices:

A key driver of data usage on the network is a three- to four-times increase in the use of Net-connected devices on mobile networks. In 2013 about 200 million machine-to-machine devices were in use. Today most of these devices operate over a 2G connection. But by 2016, the majority of these devices will transmit over faster 3G/4G data connections, which will also likely boost the amount of data they produce.

Total wireless subscriptions will exceed world's population:

By the end of 2015, more mobile devices will be connected to wireless networks than there are people in the world. By 2019, there will be at least 9.2 billion mobile subscriptions compared with 6.8 billion total subscriptions as of the first quarter of 2014, Ericsson's report says. This is 93 percent of the world's population.

Of course, this doesn't mean every individual on the planet will own a mobile device by the end of 2015. Instead, it shows how quickly people around the world are adopting and signing up for mobile service on multiple devices, including traditional mobile phones, smartphones, and tablets.

In terms of total wireless subscribers, mobile broadband is where the growth is throughout the world with mobile subscribers growing at a clip of 35 percent year over year for a total of 2.3 billion mobile data customers in the first quarter of 2014. Of those mobile broadband customers, about 240 million of them are on 4G LTE networks today. This is a big increase from 2013, when only 35 million customers throughout the world were using 4G LTE service.

The growth in mobile data and 4G LTE in particular is expected to continue, with roughly 80 percent of all mobile subscriptions in 2019 for mobile broadband services. And the faster 4G LTE service will account for 30 percent of those mobile data subscriptions, Ericsson predicts.

Smartphone sales are a key factor in fueling data growth:

Much of this growth is driven by the sale of smartphones. In the first quarter of 2014, about 65 percent of all phones sold were smartphones. This is up from 50 percent a year earlier. While sales are growing, Ericsson notes that today only 35 percent of the world's mobile users are currently using smartphones.

Ericsson

Mobile subscribers will use more data:

Ericsson estimates that in 2013 the average smartphone user consumed about 650 megabytes of data per month. By 2019, the average smartphone subscriber will consume 2.5 gigabytes of data per month.

Growth in 4G LTE deployment is a contributor to a worldwide increase in mobile data:

Mobile operators around the world are ramping up deployment of LTE networks. But it looks like North America will continue to see the highest levels of penetration. In 2019, Ericsson expects wireless operators in Europe to cover about 80 percent of the population with LTE service. But market penetration will only be about 30 percent. Meanwhile, in North America wireless operators will have about 85 percent of subscribers on LTE in 2019.

Population coverage for LTE in North East Asia is expected to be 95 percent by 2019, with LTE penetration levels at 45 percent. By the same year, China is expected to reach over 700 million LTE subscriptions, representing more than 25 percent of total global subscriptions for LTE.

How Ericsson can help:

Ericsson says that its wireless operator customers are already preparing for the massive growth in data.

"Any service provider will tell you that anticipating network capacity is their No. 1 issue," Arun Bhikshesvaran, chief marketing officer for Ericsson, said during a webcast explaining the results of the Mobility Report. "It requires more spectrum, expansion of backhaul, and the densification of the network."

Bhikshesvaran added it also requires that wireless operators look at device roadmaps to see what functionality will be added as well as an understanding of consumers' usage patterns. For example, he said that Ericsson predicts a 13 times increase in video creation and consumption by 2019.

"There is a lot to consider to make sure carriers are adding capacity at the right place in the network at the right time," he said. "It's a complex science behind all of this to anticipate."

Indeed, that is why Ericsson invests in developing these reports. As a company that supplies wireless operators with the wireless and networking equipment needed to upgrade their networks and keep up with demand, it's important for Ericsson to be aware of the traffic and usage trends. And of course an explosion in data usage, like the one Ericsson is predicting, likely means good business for network-equipment suppliers now and in the future.